SUMMER TRAINING PROJECT REPORT ON PERFORMANCE ANALYSIS OFCUSTOMER RELATIONSHIP MANAGEMENT SYSTEM HSBC BANK CONNAUGHT PLACE BRANCH DELHI IN PARTIAL FULFILLMENT OF THE REQUIREMNT FOR THE AWARD OF THE DEGREE OF MASTERS OF BUSINESS ADMINISTRATION SUBMITTED BY SANDEEP KUMAR MBO6042 (2006-2008) EXTERNAL GUIDANCE INTERNAL GUIDANCE Mr. FACULTY IMS DEHRADUN 1
127
Embed
PERFORMANCE ANALYSIS OF CUSTOMER RELATIONSHIP MANAGEMENT SYSTEM [HSBC] (2)
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
SUMMER TRAINING
PROJECT REPORT
ON
PERFORMANCE ANALYSIS OFCUSTOMER RELATIONSHIP MANAGEMENT SYSTEM
HSBC BANK CONNAUGHT PLACE BRANCHDELHI
IN PARTIAL FULFILLMENT OF THE REQUIREMNT FOR THE AWARD OF THE DEGREE OF
MASTERS OF BUSINESS ADMINISTRATION
SUBMITTED BY
SANDEEP KUMAR
MBO6042
(2006-2008)
EXTERNAL GUIDANCE INTERNAL GUIDANCE
Mr.
FACULTY
IMS DEHRADUN
INSTITUTE OF MANAGEMENT STUDIES
DEHRADUN
1
DECLARATION
I hereby certify that the work which is being presented in the project report
“Performance Analysis of Customer Relationship Management System ” of HSBC Bank, Connaught Place Delhi
for partial fulfillment of the requirements for the degree of “Master of
Business Administration” submitted to Institute of Management Studies,
Dehradun affiliated to Uttarakhand Technical University, is record of my
own work and was carried out under the guidance of Miss. Chitra
SANDEEP KUMAR
2
ACKNOWLEDGEMENT
My project bears the imprint of many people. I am highly indebted to Mr.
who provided me all the guidance, support and cooperation that was
required for the successful completion of this project. I express own deep
sense of indebtedness to him for his keen interest in the subject and
encouragement.
My thanks also go to the faculty member Mr. ( ) for his sincere
exhortations, constant encouragement and constructive criticism throughout
the preparation of the report.
My overriding debt continues to my parents and my friends
who provided me with the time, support and inspiration needed to complete
the project.
SANDEEP KUMAR
3
Table of Contents
Industry Overview-Wealth Management
Company Overview- HSBC
HSBC India
Wealth Management at HSBC
Customer Relation Management System
CRMS at HSBC
Segmentation based on CRMS at HSBC
Customer Net Present Value
Using CLV to create customer clusters
Analysis of CRMS (Survey)
Recommendations
Constraints
Feasibility
Learning
Bibliography
4
OBJECTIVE
The primary objective of this research was to explore the information
requirements of front-end sales by surveying representatives of the bank.
Surveys were designed to generate a list of information used by them and
gather an importance rating for each piece of information. The results
showed that while a majority of the information required or considered
important by sales agents is available to them through the system, some
important information such as customer profitability are not available. The
challenge for HSBC is to develop and manage a proactive customer contact
plan incorporating both a data capture procedure and an information sharing
mechanism to deliver the knowledge to sales agents across all channels.
This study found that there are differences in information requirements
between relationship managers and customers and the same need to be
addressed by the bank.
5
RESEARCH METHODOLOGY
Research methodology is a systematic way which consists of series of
section or steps necessary to carry out research effectively and the desired
sequencing of the marketing research is a process which involves a number
of inter related activities which overlap and rigidly follow a particular
sequence. It consists of the following steps:
1. Formulating the objective of the study.
2. Designing the method of data collection.
3. Selecting the sample plan.
4. Collecting the data.
5. Processing and analyzing the data.
6. Reporting the findings.
6
MEANING OF RESEARCH
Research in common parlance refers to a search for knowledge. One can
also define research as a scientific and systematic search for pertinent
information as a specific topic. In fact, research is an era of scientific
investigation. The advanced learner’s dictionary of current English lays
down the meaning of research as a “careful investigation or enquiry
especially through search for new facts in any branch of knowledge”.
Redman and Mory define research as a “systematized effort to gain new
knowledge”.
Some people consider research as movement, a movement from the
known to unknown. It is actually a voyage of discovery. We all possess
the vital instinct of inquisitiveness makes us probe and attain full
understanding of the unknown. This inquisitiveness is the mother of all
knowledge and the method, which man employs for obtaining the
knowledge of whatever the unknown, can be termed as research.
RESEARCH APPROACH
The research approach for the purpose was secondary to collect the
information on the subject.
7
RESEARCH INSRUMENT
I used direct observation, customer data and survey as research
instrument.
RESEARCH DESIGN
In this project, I used exploratory research design and for data collection-
fill up the questionnaires from the customers of mobile, survey of the
market and some information was collected by interview of the users of
the cellular at Dehradun.
SAMPLING
I used random sampling method because from a finite population refer to
that method of sample selection which gives each possible sample of
combination an equal probability of being picked up and each item in the
entire population to have an equal chance of being included in the
sample.
SAMPLE DESIGN
A sample design is a definite plan for obtaining a sample from a given
population.
8
Sample design may as well lay down the number of items to be included
in the size of the sample.
i. Type of universe
The first step in developing any sample design is to clearly define the
set of objects, technically called the universe to be studied. The
universe is infinite as the number of customer is unlimited.
ii. Sampling unit
The study to be taken on the suppliers and consumer of mobile
connection.
iii. Size of the samples
As the universe is infinite so the number of consumers will be limited.
Hence sample size is of 50 customers belonging to various sections of
the society.
9
STEPS IN SAMPLING
1. Define the universe
2. Select the sample frame
3. specify the sampling units
4. Select the sample design/methods
5. Determine the sample size
6. specify the sampling plan
7. Select the sample
10
AREA OF RESEARCH
DEHRADUN
SOURCES OF DATA
RESEARCH DATA
Data collection is the key activity of marketing research. The design of the
data collecting method is the backbone of the research design.
Data constitute the foundation of statistical analysis and interpretation.
Hence the first step in statistical work is to obtain data.
Data can be obtained from two important sources, namely:
Primary data
Secondary data
PRIMARY DATA:
Primary data are gathered for the specific purpose or for a specific research
project, consisting of original information for the fulfillment of the project
objective.
When the data are required for the particular study it is necessary to collect
original data.
11
Primary data can be collected in four ways;
1) Observation
2) Focus
3) Survey
4) Experiment
SECONDARY DATA:
Secondary data are the data which already exists somewhere. Secondary data
provide starting point for research and serves the advantage of low cost and
ready availability. Secondary data can be divided into two types:
Internal data
External data
When the data researcher uses the data that has already been collected by
other data are called secondary data. Secondary data can be obtained from
journals i.e. internal sources, reports, government publication and books,
professional bodies etc.
12
Internal data are reports and memos generated within an organization to
facilitate its operations. External data are those especially produced for
outside consumption.
Sources from which I have taken the secondary data are as under:
Direct observation
Websites
Books
Survey and customer data and reports
13
WEALTH MANAGEMENT
A progression from the aggressive retail banking focus of most large banks
across the world, wealth management is a reflection of the emerging trend of
an altogether new set of clients, a subset of “individual” or “retail” clients,
but with the potential to amass significantly higher levels of wealth.
Naturally, such clientele require a higher level of personalization, both in
terms of relationship management as well as product offering. To the banks,
it means a big opportunity in terms of quantum of assets managed as well as
ongoing fee income potential.
As was the case in retail banking, the initial wealth management offering
was largely undifferentiated and commoditized, with some cosmetic changes
by way of stratifying higher-end retail customers as ‘Gold’, ‘Preferred’,
‘Platinum’ etc., often based on very simple criteria like account balances,
deposit/asset values etc. Apart from preferential interest rates or fees and
some degree of personalized service .e.g. tagging a ‘Relationship Manager’
to a set of clients, there was no significant value added from the client’s
point of view.
What most banks were clearly missing was the concept of understanding the
customer’s current financial position, ongoing financial needs, funds flow
requirements, risk appetite levels and providing a basket of investment
14
options and value-added advisory services. The thrust was more on
safeguarding the customer’s wealth, resulting in mismatched offerings at
sub-optimal returns.
The wealth creation activity is no longer restricted to advanced markets as
emerging markets are being tightly integrated with the global economy.
New, wealthy investors, in large numbers, are arriving on the scene in an
unprecedented manner. Their expectation: professional guidance from their
financial services provider to grow, protect, and transfer their wealth freely
across borders, to enable them to maximize their wealth as well as diversify
their interests.
Banks have acted swiftly in spotting and leveraging this opportunity to tap
this rapidly growing and extremely promising segment and augment their
revenues. The result: an intensely competitive environment with financial
services providers outdoing each other in terms of promised returns, risk
management, personalization of services as well as customer experience.
Banks have also leveraged their distribution capabilities and captive
customer base effectively to market a wide spectrum of ‘wealth
management’ offerings to enable their clients accumulate, grow and preserve
their wealth, tailored to customer-specific needs on cash flows, returns and
risk appetite.
These days bank provides its customers and clients with the facility of
financial planning.
15
This particular service is synonymous with the concept of wealth
management.
It is the integration of asset, debt, and risk management strategies into one
seamless financial solution .it involves certain critical issues like asset
allocation, estate and trust planning, retirement planning etc. It can be
defined as a series of logical financial transitions
Accumulation of wealth
Protection of wealth
Tax advantaged distribution of wealth during life
Tax advantaged distribution of wealth at death
Such financial transitions depend upon the stage of life an individual is in
and the personal goals for transfer of assets.
16
NEED FOR WEALTH MANGEMENT
Investors today face bewildering choices about what to do with their money.
As market conditions change and new financial products appear and
disappear, making sense of information and innuendo about effective ways
to manage wealth can be extraordinarily difficult. Making decisions about
investments and portfolios is no easy task. Individuals are bombarded with a
dizzying array of investment options. Information abounds, advice comes
from all quarters, recommendations often contradict one another, and new
products and asset classes are invented at breakneck speed. How should
investors make sense of the chaos of information and innuendo that exists
about wealth management?
How should they create a portfolio of investments that will provide
sufficient money to see them through life and help them achieve their goals?
While these questions may seem daunting, they are necessary. Indeed, the
need to save and invest money for the future is one of life's certainties, along
with death and taxes (and not unrelated to them).
FINANCIAL PLANNING MANAGER
Wealth management is a knowledge business and deals with customers who
have specific short and long-term investment plans and cash flow
requirements. They need to feel valued and unique; unsurpassed investment
performance is one of their key expectations. It is critical for the financial
advisors to understand not just their clients’ risk disposition, wealth base and
17
funds flow requirements, but also the banking & investment milieu, and
arrive at a structured investment plan tailored to the client needs. This
domain is still in a nascent stage and growing rapidly. This growth has
primarily been driven by demographic and economic shifts, increased
customer expectations and demands for sophisticated offerings, coupled with
real-time information, personalized service, and most importantly, full
control over their investment portfolio.
Apart from growing the net worth, the financial service providers need to
address unique challenges in dealing with High Net worth Individuals.
Managing such a relationship requires a different orientation & positioning
from standard retail banking: one that is primarily driven by personalization,
readiness of information and based on a long-term relationship with the
customer and her immediate circle (family, friends, social circle etc.), whilst
continuing to preserve very high degree of confidentiality in the client
relationship. The relationship is essentially based on trust the customer
reposes in her financial advisor. The advisor is expected to not just control
and grow the assets but continuously aim to increase the rates of return and
minimize risk and eventuality of loss. Typically, an advisor works with the
customer in developing an investment strategy to achieve her financial goals.
The appropriate mix of investment products like equities, fixed-income
securities, mutual funds etc. are purchased and monitored in keeping with
customer’s strategy for principal growth, income and liquidity.
18
A key factor contributing to the growth of private banking services is the
advent of advanced tools that help to better understand & profile customers,
recommend, plan & forecast possible outcomes arising out of various
investment options (what-ifs) etc., which financial advisors have been able
to leverage strongly to give greater comfort to their investor clients.
WEALTH MANGEMENT IN INDIAN CONTEXT
The Indian wealth management market is ripe for development. Strong
economic growth has created wealth that needs somewhere to go and
consolidated the position of those with old money. Despite the country's
rapid development the market is immature; investment propositions have
traditionally centered on deposit accounts and currency controls limit access
to the international capital markets.
But change is in the air and both domestic banks and international players
alike are now gearing up to meet the needs of the wealthy. The natural
evolution of the wealth management market can only be helped along by
continued economic growth that will do much to stimulate demand.
So with such an abundance of wealth then how can banks, both domestic
and international, best meet demand? The wealth management industry at
present is immature compared with offerings by private banks and wealth
19
managers in the West. There is no doubt however than the Indian market is
in the early stages of development.
HSBC
INTRODUCTION
Headquartered in London, HSBC is one of the largest banking and financial
services organizations in the world. HSBC's international network comprises
around 10,000 offices in 82 countries and territories in Europe, the Asia-
Pacific region, the Americas, the Middle East and Africa.
With listings on the London, Hong Kong, New York, Paris and Bermuda
stock exchanges, shares in HSBC Holdings plc are held by around 200,000
shareholders in over 100 countries and territories. The shares are traded on
the New York Stock Exchange in the form of American Depositary
Receipts.
Through an international network linked by advanced technology, including
a rapidly growing e-commerce capability, HSBC provides a comprehensive
range of financial services: personal financial services; commercial banking;
corporate, investment banking and markets; private banking; and other
activities. Although the Group’s holding company, HSBC Holdings plc, was
formed as recently as 1991, many of its principal constituent companies
opened for business over a century ago and have long experience in their
home and international markets.
20
BUSINESS PRINCIPLES AND VALUES
The HSBC Group is committed to five core business principles:
outstanding customer service;
effective and efficient operations;
strong capital and liquidity;
prudent lending policy;
strict expense discipline;
Business principles are supported by loyal and committed employees who
make lasting customer relationships and international teamwork easier to
achieve.
HSBC also operates according to certain key business values:
the highest personal standards of integrity at all levels;
commitment to truth and fair dealing;
hands-on management at all levels;
commitment to quality and competence;
a minimum of bureaucracy;
fast decisions and implementation;
putting the team’s interests ahead of the individual's;
the appropriate delegation of authority with accountability;
21
fair and objective employer;
a diverse team underpinned by a meritocratic approach to
recruitment/selection/promotion;
a commitment to complying with the spirit and letter of all laws and
regulations wherever we conduct business;
the exercise of corporate social responsibility through detailed assessments
of lending proposals and investments, the promotion of good environmental
practice and sustainable development, and commitment to the welfare and
development of each local community.
HSBC’s reputation is founded on adherence to these principles and values.
All actions taken by a member of the HSBC Group or staff member on
behalf of a Group company should conform to the principles and values.
Additionally, they have codes of conduct for staff in all operations.
22
GROUP STRUCURE
HSBC Holdings is a public limited company incorporated in England and
Wales.
Headquartered in London, the HSBC group operates in five regions: Europe;
Hong Kong; the rest of Asia Pacific; including the Middle East and Africa;
North America; and South America.
The entities which form the HSBC Group provide a comprehensive range of
financial services to personal, commercial, corporate, institutional and
investment, and private banking clients. To more easily promote the Group
as a whole, HSBC was established as a uniform, international brand name in
1999. In 2002, HSBC launched a campaign to differentiate its brand from
those of its competitors by describing the unique characteristics which
distinguish HSBC, summarized by the words 'The world's local bank'.
23
HSBC Bank- India
The antecedents of the HSBC Group in India can be traced back to October
1853 when the Mercantile Bank of India, London and China was founded in
Bombay (now Mumbai). Starting with an authorized capital of Rs 5 million,
the Mercantile Bank soon opened offices in London, Madras(Chennai),
Colombo and Kandy, followed by Calcutta(Kolkata), Singapore, Hong
Kong, Canton(Guangchow) and Shanghai by 1855. The following hundred
years were in many ways propitious for the Mercantile Bank. In 1950 it
moved into its new head office building in Mumbai.at Flora Fountain.
The acquisition in 1959 by The Hongkong and Shanghai Banking
Corporation Limited of the Mercantile Bank was a decisive factor in laying
the foundation for today's HSBC Group. Founded in 1865 to serve the needs
of the merchants of the China coast and finance the growing trade between
China, Europe and the United States, HSBC has been an international bank
from its earliest days.
After the Mercantile Bank was acquired by The Hongkong and Shanghai
Banking Corporation, the Flora Fountain building became and remains to
this day, the Head Office of the HSBC Group in India.
24
Through the 1990s, HSBC has vigorously developed its role as one of the
leading banking and financial services organizations in the world. Its
strategy of 'managing for value' emphasizes the Group's unique balance of
business and earnings between older, mature economies and faster-growing
emerging markets.
HSBC in India is proud to have retained the Group's pioneering streak by
being an active partner in the development of the Indian banking industry -
even giving India its first ATM way back in 1987. The organization’s
adaptability, resilience and commitment to its customers have further
enabled it to survive through turbulent times and prosper through good times
over the past 150 years.
The Bank offers a comprehensive suite of world-class products and services
to its corporate and commercial banking clients as also to a fast growing
personal banking customer base. It has 33 branches in the cities of